Family Law

Oregon Supreme Court Rules On Messy Multimillionaire Heir, Egg Donor Case

Once again, a friendly reminder about sending your clients to attorneys with specialized experience in assisted reproductive technology when entering such contracts.

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family court divorce matrimonial law photo by David Lat

Family court (by David Lat).

This is one of those cases where truth is stranger than fiction. Jordan Schnitzer, a philanthropist multimillionaire with two daughters, wanted a son. After failed anonymous egg donation and gestational surrogacy attempts, another route opened to him. His 30-year-younger girlfriend, Cory Sause — the heir to a shipping dynasty — offered her eggs. But she had a specific condition. Schnitzer would receive any male embryos formed from Sause’s eggs, and she would receive any female embryos. An agreement was struck, and the couple proceeded to create embryos.

Sause and Schnitzer split up before Schnitzer’s son was born in December 2015. And although the child was male, not female, the two have been locked in a heated legal battle over the son who is genetically related to both of them. On November 28, 2023, Oregon’s highest court waded into the drama, issuing a ruling.

Egg Donor Or Parent?

At the heart of the legal battle is the question of whether Sause is a legal parent to the child. Schnitzer and Sause didn’t just enter into a written agreement with each other. They also signed documents with the fertility clinic performing the services to create the embryos. But their private contract purported to supersede those terms. It was prepared by Schnitzer’s own business attorney, and has become known, by the attorney’s last name, as the Nudelman agreement. It states:

Designation of Embryos. Notwithstanding anything to the contrary in the [Directed Sperm Donor Consent Form signed by Schnitzer] or [the Informed Consent for Egg (Oocyte) Donation signed by Sause], Schnitzer hereby relinquishes any claim to or jurisdiction over any female embryos from Sause and any resulting female offspring that might result from the use of Sause’s eggs. Sause confirms and acknowledges that Schnitzer has full jurisdiction custodial rights over the future disposition of male embryos created from her eggs and she renounces any rights and responsibilities of custody of any male embryo.

Notably, Sause points out that while the contract has Schnitzer giving up any claim to rights to any offspring from female embryos, the agreement did not technically contain parallel language for Sause giving up rights to offspring from male embryos (only “full custodial rights” regarding the male embryos). Sause contends that she gave up only custodial rights and responsibility to the male embryos (not the offspring). In response, Schnitzer argues that the lack of parallel language was merely a drafting oversight.

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I’ll pause briefly to offer a friendly reminder here about the importance of sending your clients to attorneys with specialized experience in assisted reproductive technology when entering such agreements. That is, if you want to avoid a problematic contract being named after you in a state supreme court opinion.

Messy Facts

The ambiguous language of the Nudelman agreement didn’t help Schnitzer’s case. But his own words and actions added to the confusion as to Sause’s role with the child. During the pregnancy, Schnitzer referred to the fetus as “our baby” in text messages to Sause. He also sent text messages to Sause’s mother, including an ultrasound image of the fetus with the words, “Your grandson!” Sause’s mother testified to the trial court that Schnitzer also attempted, unsuccessfully, to enlist Sause’s parents’ help to convince Sause to marry him and co-parent the child. After the birth of the child — and some hostile communications from Sause — Schnitzer changed his tune. He cut off contact with Sause and her parents.

Ruling Whiplash

Initially, the trial court found in favor of Sause, determining that her biological connection, plus that fact that she had “grasped her opportunity to parent the child in an effort to develop a relationship,” amounted to enforceable parental rights to the child. The trial court leaned heavily on the U.S. Supreme Court’s ruling in the case of Lehr v. Robertson, where the biological father (by sexual intercourse, not assisted reproductive technology) was fighting against the adoption of his genetic child by another couple.

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But Schnitzer appealed to the Oregon Court of Appeals. And won. The intermediate court held that Sause was not a parent. In a split decision, the lead opinion found that mere biological connection does not confer parental rights. The court found that the genetic connection presented merely an opportunity to develop parental rights. However, the court ruled that Sause had not adequately grasped that opportunity because, among other things, “she expressly had disavowed any financial or other responsibility” in the Nudelman agreement.

Donor Statute Update

In 2018, while the case was ongoing, Oregon updated its donor laws. The new statutes revised state laws about sperm donation and artificial insemination to use gender-neutral language and to include — as important here — egg and embryo donation. Schnitzer argued that the new law could be applied by courts considering parental status in donation arrangements, including his own case.

What’s A State Supreme Court to Do?

The Academy of Adoption and Assisted Reproduction Attorneys (known as AAAA), weighed in, filing an amicus brief supported by the American Society for Reproductive Medicine and RESOLVE: the National Infertility Association. The brief argued that the 2018 donor law update should apply to this case and also stressed the long history in Oregon of legally recognizing gamete donors (historically sperm donors) as merely donors, and not parents. AAAA argued that in the context of assisted reproduction, a finding that a genetic connection to a child equates to the genetic contributor being a legal “parent,” or provides that genetic contributor with the right to secure a parental status based on genetics, would inject uncertainty into the assisted reproduction process and the establishment of legal parentage in the state of Oregon.

Outside the context of the Schnitzer-Sause case, the consideration of a donor’s right to assert parental status can have far-reaching effects. For instance, there is a strong push, especially by donor-conceived persons, to create openness and transparency in gamete donation. A legal determination that a biological connection entails parental rights directly, or when combined with a biological parent vaguely “grasping” an opportunity to establish a parent-child relationship, would likely terrify intended parents away from openness and connection with donors. It could also deter donors fearful of legal responsibilities.

The Ruling: ART Is Different

In good news, and as argued by AAAA, the Oregon Supreme Court found that parentage determinations are different when conception is through assisted reproductive technology (ART), rather than sexual intercourse. So, the court rejected Sause’s arguments that her mere biological connection to Schnitzer’s son entitled her to parental rights, specifically rejecting the application of Oregon’s biological-connection parentage statute in the context of assisted reproduction.

The court also rejected the application of the 2018 updated donor statute. However, the court found that Oregon’s donor statute, even in its pre-updated form, was applicable to both Sause and Schnitzer, and applied the plain meaning of the term “donor.” The court concluded that neither Sause nor Schnitzer were entitled to any “rights, obligations or interest” with respect to the child based on their genetic connection to him in this context. Schnitzer’s parentage, however, was established through his surrogacy agreement with the gestational carrier and the gestational carrier’s spouse, and a court’s subsequent ruling of parentage based on the surrogacy arrangement. “Had Sause been a party to [the surrogacy agreement], her parentage might have been established as well.” But she was not.

It’s Not Over

The court rejected Sause’s genetic-connection argument and concluded that Sause was not a legal parent. But the court found that a question of Sause’s potential rights remained. Whether a gamete donor like Sause can seek limited rights to visitation or contact with the child based on her written agreements with Schnitzer is not a question that Oregon courts have considered. So the court remanded to the trial court, specifically not on the question of whether Sause may be a legal parent to the child based on genetics, but rather whether she may have enforceable, nonparental, contract rights.

I touched base with the author of the AAAA amicus brief, attorney Robin Pope. Pope has been practicing assisted reproductive technology law in Oregon for more than 25 years and was happy with the court’s ruling. “Certainty as to who is a parent in donation and surrogacy arrangements is fundamental to everyone — the donors, surrogates, intended parents, and, most importantly, the children.” This case has difficult facts, but the outcome here was the right one.

Cheers to the Oregon Supreme Court for establishing this important precedent.

Ellen TrachmanEllen Trachman is the Managing Attorney of Trachman Law Center, LLC, a Denver-based law firm specializing in assisted reproductive technology law, and co-host of the podcast I Want To Put A Baby In You. You can reach her at babies@abovethelaw.com.

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